Mr.

The purpose of this research was to analyze the effect of sovereign sukuk issuance as state fiscal funding and macroeconomics on the Islamic banking growth in Indonesia. This research used multiple linear regression analysis. This research processed data on a monthly basis with the time sequence or time series from January 2011 until May 2014 from statistic publication of Otoritas Jasa Keuangan (OJK), Badan Pusat Statistik (BPS) dan Direktorat Jenderal Pengelolaan Utang Kementerian Keuangan Republik Indonesia (DJPU). The results showed that the existence of sovereign sukuk on Islamic banking that measured by ratio of the value of ownership of sovereign sukuk domestic by Islamic banking to GDP (SUKUKa) as part of the providing a safe asset for the Islamic banking (risk free asset) has positive and significant impact on the Islamic banking growth in Indonesia that measured by the ratio of the total value of financing of Islamic banking to GDP (GROWTH). Meanwhile, the existence of sovereign sukuk on Islamic banking that measured by ratio of the value of ownership of sovereign sukuk domestic by Islamic banking to total value of financing of Islamic banking (SUKUKl) as portfolio asset to liquidity has negative and significant impact on the Islamic banking growth in Indonesia that measured by the ratio of the total value of financing of Islamic banking to GDP (GROWTH). This research also showed that the other factors such as exchange rate and inflation have negative and positif impact significantly on Islamic banking growth in Indonesia